Taxation has always been seen as a red line which the Brussels bureaucrats dare not cross. From time to time they float the possibility of a European income tax or some such idiotic idea, but so far the ratchet effect of Euro-legislation has avoided the area. However, a reader points me to the latest issue of International Tax review to warn that an upcoming EU commission proposal is for a compulsory unified common consolidated corporate tax base (CCCTB) – i.e. a common set of rules throughout the EU about how companies’ taxable profits are calculated, and a minimum tax rate.
Apparently this will done be to promote EU solidarity: "One cannot have one, an internal market without tax borders, and at the same time keep the other, effective national control over the design of tax policy," the authors said.
We have been warned. More HERE.
20 comments:
This will go some way to embedding socialism and inefficiency into the EU.
Still it will make leaving even more appealing ...
Drip, drip, drip of sovereignty. I was never asked whether i want to be part of this political construct - when can we leave?! Losing our economic independence to this degree would be the final nail in the coffin.
Browns Euro scepticism has turned out to have been a lie as the Constitution proves but surely he will not have this . He must know what a disaster it would be for an open economy like ours to have coporation tax set by a committee of bureaucrats in Brussels .
Or will he sell us all out for a chacce to be a player on the "World Stage"
Scary Stuff Monsieur . Dale
Once Brown uses the Lab whip to force thru' the constitution-in-everything-but-name corporation tax will be the least of our worries.
USER doesn't do thin end of wedges - only the thick.
Union of Subservient European Regions (USER).
This might persuade the Irish to wake up and smell the coffee. Their rate is 12.5%. Could they perhaps vote down the Constitution for us like they did Nice - but this time stick to it. Their golden economy must be under threat from this.
tapestry - isn't that that point. The Irish are doing very nicely getting grants from the EU whilst simultaneously competing (on tax rates) with the countries who are net contributors to the EU budget and could do with some of the employment coming Ireland's way. Clearly, as a conservative, I would prefer that everyone could compete on taxes and drive them down, and the EU stopped paying subsidies to member states, but we have to recognise that there is an issue here which is not a simple matter of who sets taxes.
For the UK, the proposal would be more acceptable if the minimum was slightly less than current rates but high enough to stop other countries competing on tax. In practice, it is impossible to see how in 100 years you could ever unify the rules for calculating taxable profit across Europe though, so I doubt it is even possible that this would go ahead.
Yet more proof that European "federalism" is already an accomplished fact: this goes beyond federalism to unitarism. Centrally-imposed tax harmonization of this sort would and could never happen between states within the US, and yet does the EU ever still mention "subsidiarity"?
Response from Europhobes
this year "don't be silly this will never happen"
next year "don't be silly this will never happen"
2009 "don't be silly this will never happen"
some time soon" look some amending tax treaty was necessary it will not affect the sovereignty of any of the regions that collectively used to be known as England"
The EU has crossed the tax "red line" before. We can't change the VAT rate without asking Brussels first, and we are forbidden completely from creating a local sales tax.
It only takes one government to say No to stop this. And they all will. Based on past form, only a British Tory Government would be the first to say Yes to anything quite as federalist as this. And there's never going to be another one of those.
Nothing socialist about this at all, very capitalist in fact and very pro competition. although they will never be able to set european income rates (except possibly for multi millionaires) you can see the logic behind this as it will stop companies moving to European countries just because of vvery low corporate tax rates and might add some balance into the world of European corporate business. It'd actually probably make things more competitive to an extent as companies profits are taxed on similar grounds. I don't think they'd set the minimum rate too high though, they don't really want to upset the Eastern European countries and with our relatively standard corporation tax rates (although slightly lower than the average I know) it is unlikely to affect us in a particularly negative way if at all. It would be interesting to see how some of you Tories would react to a cap on corporation tax, I think the resultant comments would be quite different.
Socialism and inefficiency are already embedded in the EU.
Why do you think the Labour party shifted from being anti-Europe to its present slavish Europhilia?
They worked out, in particular the Unions worked out that, given the general EuroMindset, you can get Socialist measures embedded forever in the EU as overturning them is all but impossible eg The Working Time Directive.
The EU is the perma-slime of Socialism.
Circa 1990 all the overt Marxists realised they would have to achieve their goals by other means. They all became fervent workers for the European Project.
Of course the Conservative Party has helped them at every step.
Of course there will be increasing co-ordination of fiscal and economic measures; the development of the federal state is patently clear. Why should there be surprise?
Leave.
Norway did and is on excellent terms with the EU. It is also the state with the highest standard of living in Europe.
Leave.
"tapestry August 03, 2007 3:53 PM"
the bulgarians have a lower rate than the irish - 10% - introduced last year.
they are also introducing a 10% flat tax on income next year:
Flat tax reform in Bulgaria
It's all in the constitution that dare not speak its name.
Danvers said "The Irish are doing very nicely getting grants from the EU". This is a fallacy. The net receipts from the EU to Ireland equivocate to one year of UK defence spending.
You might as well say that Northern Ireland is doing very well from British money.
Southern Irish success is due to low business taxes. The EU should steer clear of trying to restrict national independence in this matter although many Franco-German politicians have been pushing to prevent low taxes in the EU for years.
I agree ... Ireland would (have to) leave the EU if this ever came forth ... as would any financial capitals really, can't have some cheese-eating pen-pusher deciding what British companies pay to the fuhrer.
Dear Iain,
Thanks for featuring our story on a CCCTB for the EU, but I must pick you up on your post.
As anyone who clicked through to the story would have read, the recommendation that a CCCTB should be compulsory came from three German academics, not the Commission.
Ireland, the UK and other opponents of a CCCTB believe it will lead inevitably to a harmonised corporate tax rate. They are taking part in the working group, though they have no intention of joining and, as far as I'm aware, can't be forced to do so. The decision to adopt a CCCTB will be taken on the basis of qualified majority voting.
I'm all in favour of critical comment, but it's got to be fair. I don't think you or most of your correspondents were fair to the European Commission on this occasion.
Best wishes,
Ralph Cunningham,
Managing editor, International Tax Review
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